Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Lufthansa Announces Profit Of 990.000.000€  
User currently offlineAviaco From Germany, joined May 2012, 34 posts, RR: 0
Posted (1 year 5 months 1 week 2 days 16 hours ago) and read 12180 times:

Looks as if the cost cutting at Lufthansa is successful.
But they want to abandon the headquarter in Cologne in favour of Frankfurt for Lufthansa and in favor of Munich for
Lufthansa CityLine

33 replies: All unread, showing first 25:
 
User currently offlinena From Germany, joined Dec 1999, 10654 posts, RR: 9
Reply 1, posted (1 year 5 months 1 week 2 days 16 hours ago) and read 12124 times:

Quoting Aviaco (Thread starter):
Looks as if the cost cutting at Lufthansa is successful.
But they want to abandon the headquarter in Cologne in favour of Frankfurt for Lufthansa and in favor of Munich for
Lufthansa CityLine

Those figures indeed look very promising.
As for the Cologne office, I actually I wondered why they held out so long there. LH is Frankfurt, there is its heart, Cologne just a relic of bygone times with no real connection to the main operation.


User currently offlineZRH From Switzerland, joined Nov 1999, 5566 posts, RR: 36
Reply 2, posted (1 year 5 months 1 week 2 days 16 hours ago) and read 12093 times:

Do have a link for the source?

User currently offlineAviaco From Germany, joined May 2012, 34 posts, RR: 0
Reply 3, posted (1 year 5 months 1 week 2 days 16 hours ago) and read 12102 times:

here is the link in english:

http://investor-relations.lufthansa....s-inklusive-sondereffekte-990.html


User currently offlineZRH From Switzerland, joined Nov 1999, 5566 posts, RR: 36
Reply 4, posted (1 year 5 months 1 week 2 days 16 hours ago) and read 11992 times:

Quoting Aviaco (Reply 3):
here is the link in english:

Thanx. Looks really good. I am wondering how much SWISS contributed to this result.


User currently offlineAviaco From Germany, joined May 2012, 34 posts, RR: 0
Reply 5, posted (1 year 5 months 1 week 2 days 16 hours ago) and read 11897 times:

Probably quite a bit of it!  .
When I tried to book a LH flight from HAJ to AGP last summer, I ended up on a Swiss connection via ZRH.
They seem to operate very integrated by now. At least when it comes to sales.


User currently offlineStratofish From Germany, joined Sep 2001, 1051 posts, RR: 5
Reply 6, posted (1 year 5 months 1 week 2 days 14 hours ago) and read 11137 times:

According to DER SPIEGEL they want to relocate some 700 Jobs to foreign countries and are in the process of identifying more that can be outsourced to third party companies because SCORE so far has not met expected savings.

All the while they earn almost a billion and want to buy 100 new planes?? And also cut dividend of shareholders??

Everyone is loosing out it seems. Contemporary LH management must be out out of their minds collectively.



The Metro might be the Sub(optimal)way
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 7, posted (1 year 5 months 1 week 2 days 13 hours ago) and read 11021 times:

Quoting Stratofish (Reply 6):
According to DER SPIEGEL they want to relocate some 700 Jobs to foreign countries and are in the process of identifying more that can be outsourced to third party companies because SCORE so far has not met expected savings.

All the while they earn almost a billion and want to buy 100 new planes?? And also cut dividend of shareholders??

Everyone is loosing out it seems. Contemporary LH management must be out out of their minds collectively.

Much of the profit was down to exceptional items, the underlying profit on operations was 524m Euros. Initially this seems quite afigure, however on a turnover of 30b Euros its nothing special, hence the suspension of the dividend, more cost cutting, and the need for a more efficient fleet. LH managements minds appear to be firmly in place and in full working order.


User currently offlineStratofish From Germany, joined Sep 2001, 1051 posts, RR: 5
Reply 8, posted (1 year 5 months 1 week 2 days 13 hours ago) and read 10860 times:

Quoting Bongodog1964 (Reply 7):
LH managements minds appear to be firmly in place and in full working order.

I beg to differ.

According to one report/analysis (the way I read it) LH's operating profit per employee is a very healthy one. It is right where it should be. Any higher would indicate a criminal employee abuse structure like over at Ryanair but it is still a healthy one. So there is absolutely no need for any cost cutting at the employee front.
Same goes for IAG, but that's for a different thread.
http://centreforaviation.com/analysi...g-and-ryanair-excel-on-costs-97635



The Metro might be the Sub(optimal)way
User currently offlineAA94 From United States of America, joined Aug 2011, 577 posts, RR: 2
Reply 9, posted (1 year 5 months 1 week 2 days 8 hours ago) and read 10174 times:

Quoting Stratofish (Reply 8):

I think the point that Bongodog is trying to make is that, while LH's profit is impressive, it is not in proportion to the amount of revenue they've brought in.

In the study you posted, you'll note the Lufthansa's cost per employee is a bit higher than some of its competitors. I'd agree that the overall health of the group looks promising, but I don't believe that management is wrong to pursue further cost-cutting measures.

If LH's labor cost is only a small percentage of total revenue, that seems to indicate that other operational costs (aircraft, maintenance, fuel) makes up another, larger portion of their cost base. I find myself confused as to your outrage; you seem to discredit the need for more fuel-efficient planes, yet the study you link to seems to confirm that labor is as low as it can go, and it's time to trim in other ways.



Choose a challenge over competence / Eleanor Roosevelt
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 10, posted (1 year 5 months 1 week 2 days 6 hours ago) and read 9376 times:

Quoting Stratofish (Reply 8):
I beg to differ.

According to one report/analysis (the way I read it) LH's operating profit per employee is a very healthy one. It is right where it should be. Any higher would indicate a criminal employee abuse structure like over at Ryanair but it is still a healthy one. So there is absolutely no need for any cost cutting at the employee front.
Same goes for IAG, but that's for a different thread.
http://centreforaviation.com/analysi...97635

Reading the same article where it states in the conclusion that LH are firmly in the middle ranks on labour costs with IAG behind them (due to IB) I can't see how you've decided that LH management have got it all wrong. No one can stay even in the mid zone by sitting back and doing nothing. Take that approach and watch the competition leap ahead.

The LH profit figure looks impressive, but as a % of turnover it ought to be a lot higher.


User currently offlinePanHAM From Germany, joined May 2005, 9165 posts, RR: 29
Reply 11, posted (1 year 5 months 1 week 2 days 5 hours ago) and read 8824 times:

Quoting Stratofish (Reply 8):
According to one report/analysis (the way I read it) LH's operating profit per employee is a very healthy one. It is right where it should be. Any higher would indicate a criminal employee abuse structure l

Excuse me, but 524 m € on a turnover of 30 billion e is far from healthy. They have earned their costs and some on top of it. To analyse it we would need the annual freport or some preliminary informaiton. Once all that is available and the impact of passenger tax, co² tax and the night curfew on profits is on the table we can what is healthy and what is not healthy.


BTW, nobody is forced at gunpoint to work for a company. .



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently onlineflyglobal From Germany, joined Mar 2008, 572 posts, RR: 3
Reply 12, posted (1 year 5 months 1 week 2 days 5 hours ago) and read 8569 times:

You need to put German labor relations into account when LH makes employee related decisions.
In Germany the easiest to reduce the number of employees at relatively 'lowest' cost if a decision for 'subsidiary closure' (German language: Standortschliessung) is taken.
In this case other labor rules apply compared to lowering the same number of employees across several subsidiaries.

So from a management position only it is the most efficient one. From an employee perspective of course not.

Regards

Flyglobal


User currently offlineStratofish From Germany, joined Sep 2001, 1051 posts, RR: 5
Reply 13, posted (1 year 5 months 1 week 2 days 3 hours ago) and read 7340 times:

Quoting AA94 (Reply 9):
I find myself confused as to your outrage; you seem to discredit the need for more fuel-efficient planes, yet the study you link to seems to confirm that labor is as low as it can go, and it's time to trim in other ways

Actually we do agree then. I never discredited the need for more fuel efficient planes (no wonder if you look at fleet age). But as you pointed out labor is very low already, so it's time to review strategy then, not to outsource more of the already shrunk staff.

Quoting Bongodog1964 (Reply 10):
Reading the same article where it states in the conclusion that LH are firmly in the middle ranks on labour costs with IAG behind them (due to IB) I can't see how you've decided that LH management have got it all wrong.

I read their findings the tables differently than the authors do.

Quoting Bongodog1964 (Reply 10):
No one can stay even in the mid zone by sitting back and doing nothing. Take that approach and watch the competition leap ahead.

In a race to the bottom a 'leap ahead' is not healthy, in fact it might be deadly.



The Metro might be the Sub(optimal)way
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 14, posted (1 year 5 months 1 week 2 days 3 hours ago) and read 7248 times:

Quoting Stratofish (Reply 13):
I read their findings the tables differently than the authors do.

When you interpret tables in a completely different way to the people who compiled them, its highly likely that you have such a firmly fixed opinion that nothing will ever change your viewpoint.

LH are in a competitive marketplace, not only do they need to compete against other airlines, they also have to compete against all the other investment opportunities that their shareholders compare them to. An investor with say 1m euros invested in LH and seeing a poor return might decide to sell their shares and invest in oil and gas, hotels, food retailing, or anything else offering a better return.


User currently offlinePellegrine From United States of America, joined Mar 2007, 2362 posts, RR: 8
Reply 15, posted (1 year 5 months 1 week 2 days 2 hours ago) and read 7093 times:

Quoting Bongodog1964 (Reply 7):
underlying profit on operations was 524m Euros. Initially this seems quite afigure, however on a turnover of 30b Euros its nothing special,
Quoting PanHAM (Reply 11):
Excuse me, but 524 m € on a turnover of 30 billion e is far from healthy.
LH is one of the top airlines in the industry with regards to profit. Still...basically a return of 3.29% on your investment. A lot better than most airlines, but just beyond keeping pace with inflation. Even the stock price 2 years ago was in the same range as now. Still, LH is one of the top profitable airlines over the past 10 years.

The operating profit is just keeping in place with inflation however. This is still better than most airlines worldwide.

[Edited 2013-02-20 02:55:42]


oh boy!!!
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 16, posted (1 year 5 months 1 week 2 days 2 hours ago) and read 6963 times:

Quoting Pellegrine (Reply 15):
LH is one of the top airlines in the industry with regards to profit. Still...basically a return of 3.29% on your investment. A lot better than most airlines, but just beyond keeping pace with inflation. Even the stock price 2 years ago was in the same range as now. Still, LH is one of the top profitable airlines over the past 10 years.

I fulyl agree that LH is one of the best airlines to invest your money in, but to all the non aviation enthusiasts of the world, its how LH compares to all the other possible investments that counts.


User currently offlinePanHAM From Germany, joined May 2005, 9165 posts, RR: 29
Reply 17, posted (1 year 5 months 1 week 2 days 2 hours ago) and read 6914 times:

we will have to wait until March 14 when the financial mreport 2012 will be announced.

The decision to close / relocate the offices CGN and Norderstedt is based on the outlook for 2013 for which Lh predicts an operating loss. Guess more info to come in the course of the day as the board informs the staff over the details of yesterdays ad-hoc message

LH is certainly one of the top airlines and they do everything to keep it that way. But they have to fight the low cost carriers, the Middle east carriers including TK, the own government which has no clue on aviation nor a concept except to tax them as high as they can and impose unpractical night bans, the global economy and fuel prices. I do not claim that this is complete.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineSYDSpotter From Australia, joined Oct 2012, 153 posts, RR: 0
Reply 18, posted (1 year 5 months 1 week 2 days 2 hours ago) and read 6853 times:

Quoting Pellegrine (Reply 15):
LH is one of the top airlines in the industry with regards to profit. Still...basically a return of 3.29% on your investment. A lot better than most airlines, but just beyond keeping pace with inflation. Even the stock price 2 years ago was in the same range as now. Still, LH is one of the top profitable airlines over the past 10 years.

Not too be picky but the true measure of 'return on investment' is actually the profit divided by the shareholders equity which is circa 8bn euros. Thus the return on equity/investment is circa 12-13% which is pretty impressive.

The 3.29% (0.9bn/30bn) you calculated represents your actual profit margin.



319_320_321_332_333_388 / 734_738_743_744_762_763_772_773_77W
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 19, posted (1 year 5 months 1 week 2 days 2 hours ago) and read 6657 times:

Quoting SYDSpotter (Reply 18):
Not too be picky but the true measure of 'return on investment' is actually the profit divided by the shareholders equity which is circa 8bn euros. Thus the return on equity/investment is circa 12-13% which is pretty impressive.

Entirely correct, but you have to take into consideration that nearly half the profit last year was down to exceptional items. The article quoted that profit from operations was 524m Euros, taking the ROE down to about 8%. Still very good compared to some investments though.


User currently offlinePanHAM From Germany, joined May 2005, 9165 posts, RR: 29
Reply 20, posted (1 year 5 months 1 week 2 days 2 hours ago) and read 6637 times:

Quoting SYDSpotter (Reply 18):
The 3.29% (0.9bn/30bn) you calculated represents your actual profit margin.

take out the one time yields from asset ales and the actual profit is € 524 Mio which is about 1,8% on turnover of all LH concern companies., Who contributed how much will be seen March 14th.



Quoting SYDSpotter (Reply 18):
Not too be picky but the true measure of 'return on investment' is actually the profit divided by the shareholders equity which is circa 8bn euros. Thus the return on equity/investment is circa 12-13% which is pretty impressive.

the shares dropped by 0,81 € today and LH is an undervalued company which would be, without the 51% mandatory German shareholders requirement a prime take over target. I read recently that they have € 4,9 billion cash, considering the value of the fleet, assets, good will etc. the value of the company is much higher.

The ROI for the shareholders will be zero when no dividend is paid.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 21, posted (1 year 5 months 1 week 2 days 1 hour ago) and read 6448 times:

Quoting PanHAM (Reply 20):
I read recently that they have € 4,9 billion cash, considering the value of the fleet, assets, good will etc. the value of the company is much higher.

The cash, assets and goodwill minus loans should add up to somewhere approximately equal to the value of the issued shares. You can't take the value of the shares, then add the cash etc.


User currently offlinePellegrine From United States of America, joined Mar 2007, 2362 posts, RR: 8
Reply 22, posted (1 year 5 months 1 week 2 days ago) and read 5754 times:

Quoting SYDSpotter (Reply 18):

Not too be picky but the true measure of 'return on investment' is actually the profit divided by the shareholders equity which is circa 8bn euros. Thus the return on equity/investment is circa 12-13% which is pretty impressive.

Perfectly fine, but what you describe is a relatively inconsequential figure. Especially for an airline whose equity position is volatile. What matters is an individual's ROI, whether that be an individual, fund, or institution. This 8% or 12.5% figure doesn't mean anything to a long-term holder of stock, nor a short-term trader. It is largely academic. It all depends on when you bought, when you sold, and what you made (if anything e.g. dividends) in between.



oh boy!!!
User currently offlineSYDSpotter From Australia, joined Oct 2012, 153 posts, RR: 0
Reply 23, posted (1 year 5 months 1 week 2 days ago) and read 5483 times:

Quoting Pellegrine (Reply 22):
Perfectly fine, but what you describe is a relatively inconsequential figure. Especially for an airline whose equity position is volatile. What matters is an individual's ROI, whether that be an individual, fund, or institution. This 8% or 12.5% figure doesn't mean anything to a long-term holder of stock, nor a short-term trader. It is largely academic. It all depends on when you bought, when you sold, and what you made (if anything e.g. dividends) in between.

Agreed, for an individual investor, you would as you said calculate your return based on the price you bought in at vs capital returns/losses and dividends received since you bought the investment. But it is still a very relevant figure when comparing actual performance vs competitors (ignoring share price movements). When compared with other airlines, the figure is impressive.



319_320_321_332_333_388 / 734_738_743_744_762_763_772_773_77W
User currently offlinePellegrine From United States of America, joined Mar 2007, 2362 posts, RR: 8
Reply 24, posted (1 year 5 months 1 week 1 day 23 hours ago) and read 5322 times:

Quoting SYDSpotter (Reply 23):
Agreed, for an individual investor, you would as you said calculate your return based on the price you bought in at vs capital returns/losses and dividends received since you bought the investment. But it is still a very relevant figure when comparing actual performance vs competitors (ignoring share price movements). When compared with other airlines, the figure is impressive.

LH is a very impressive airline   ! It is easy to laud the performance of one year; I have much respect for their performance over several.



oh boy!!!
25 PanHAM : The market capitalization of LH group right now is € 7.354.550.000, a few months ago it hovered between 4,5 and 5 billion € without any change in
26 hohd : Many of you are supporting that LH cut costs even more when they are making money (around 8 to 12% on shareholder equity). But to cut costs, they have
27 someone83 : It's rather the opposite, and is all about preparing for the future. Is batter to be ahead, instead of having to do those "panic" cuts, you see many
28 Speedbird128 : Tell that to all the bankrupt airlines. Bingo. A healthy profit of €524mil is nothing to be sneezed at and a steady profit will likely ensure the l
29 ytz : Profit only ~3.3% of revenue? Good for an airline I suppose. But more proof that airlines are utterly horrible investments. Far better to invest in th
30 Bongodog1964 : Inclusive food has more or less disappeared on short haul European econonomy flights already> Both KL and BA have introduced some form of baggage
31 MIflyer12 : The OP's thread title ignores that a lot of the headline profit is non-recurring. One can tell things are not rosy when the firm decides to eliminate
32 PanHAM : make it approx 1,8%, as mentioned before and also shown in above post 31 Non recurring effects are no turnover. Assuming that the details, wh9ich par
33 Aviaco : That would have been too long for a title, but in reply 3 I provided a link. If you click on it, you get exactly the text you are quoting
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Singapore Airlines Announces Profit Of US$792 M posted Tue May 9 2006 11:16:31 by Singapore_Air
Singapore Airlines Announces Profit Of US$618.2M posted Wed May 21 2003 11:26:48 by Singapore_Air
KLM Posts Q3 Profit Of €31 000 000 posted Thu Jan 23 2003 17:12:08 by Singapore_Air
Lufthansa Announces Q3 Operating Profit Of US$230M posted Tue Nov 11 2003 23:48:39 by Singapore_Air
Lufthansa Announces FY Operating Profit Of €20 Mil posted Tue Mar 12 2002 09:08:13 by Singapore_Air
The Net Profit Of Lufthansa/Qantas Group In 2011 posted Mon Apr 23 2012 01:21:08 by United Airline
Ryanair Announces Q1 Profit Of €137m posted Mon Jul 27 2009 06:15:40 by Pe@rson
Bmi Loss Of €66 000 000 Disclosed By Lufthansa posted Wed Mar 26 2003 00:41:23 by Singapore_Air
Lufthansa Posts H1 Profit Of US$327 Million posted Wed Aug 21 2002 12:28:55 by Singapore_Air
Thai Airways Posts Q3 Profit Of US$80 920 000 posted Thu Aug 15 2002 09:19:03 by Singapore_Air